In order to determine personal income, what adjustments have to be made to national income?
A) subtract undistributed corporate profits, corporate income tax, social security taxes, and then add government transfers and private interest payments
B) subtract undistributed corporate profits, social security taxes, government transfers, and then add private interest payments
C) subtract undistributed corporate profits, corporate consumption allowance, corporate income tax, social security tax and then add government transfers and private interest payments
D) subtract corporate income tax and social security taxes and then add corporate dividends, government transfers, and private interest payments
A
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The following is not an appropriate way to tell whether two variables are cointegrated:
A) see if the two variables are integrated of the same order. B) graph the series and see whether they appear to have a common stochastic trend. C) perform statistical tests for cointegration. D) use expert knowledge and economic theory.
Suppose that labor is the only productive resource needed. Scotland has a comparative advantage in producing firewood, while Iceland has a comparative advantage in producing wool. If the two nations trade with each other,
A. Scotland should export wool and Iceland should export firewood. B. Scotland should export both wool and firewood. C. Scotland should export firewood and Iceland should export wool. D. Iceland should export both wool and firewood.